The Telegraph recently reported that a controversial new mortgage deal is being launched by five local authorities and is being backed by Lloyds Banking Group. The scheme is reportedly being aimed at first time buyers who cannot raise the large deposits currently required. Read the full article here.
Lloyds Banking Group just happen to be one of the lenders that have been rescued by the taxpayer during the credit crisis and many taxpayers are now up in arms about the latest scheme. With only five local authorities taking part in the new scheme it will not be open to all and even more pressing is whether it is going to be left to the taxpayer to pick up the pieces again?
Stephen Noakes, Commercial Director of Mortgages at Lloyds TSB, has said:
“We know that a lot of young people turn to the Bank of Mum and Dad to get their foot on the ladder, but that’s not a solution for everyone. Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market.”
We all understand that to move the housing market along we will need to get first time buyers back in the ‘game’ but what happens if house prices fall further and the first time buyers are unable to keep up with their mortgage repayments? Who will be repaying the money then?
Is it unfair on those that cannot afford to get on the property ladder, with or without deposit help, to be helping others do just that?
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